Insurer guide · Rulings in five or more states
Diminished value claims with State Farm
A diminished value claim involving State Farm depends on your state’s law and, if you are the policyholder, on your policy’s wording. Courts have reached different results on State Farm policies. Georgia’s Supreme Court held in 2001 that the policy before it covered the loss, while courts applying Alabama, Louisiana, Mississippi, South Carolina and Tennessee law held that theirs did not.
By the Autoloss team · Reviewed by Monica Fisher · Published
Policyholder or third-party claimant
If a driver insured by State Farm hit you, you are a third-party claimant. Your claim rests on that driver’s responsibility under your state’s law, not on what the State Farm policy says. If State Farm is your own insurer, the claim rests on your policy. First-party vs third-party diminished value explains why the two are treated differently. Autoloss is independent and is not affiliated with or endorsed by State Farm. The company’s name is used here only to identify it.
Court decisions on State Farm policies
These decisions all concern policyholders’ own coverage.
| State | Case | What the court decided |
| Georgia | State Farm v. Mabry (Ga. 2001) | The policy obligated State Farm to pay for loss of value, and to assess it along with physical damage when a policyholder makes a general claim of loss. |
| Alabama | Pritchett v. State Farm (Ala. Civ. App. 2002) | The repair-or-replace wording did not require restoring the car to its pre-collision value. |
| Louisiana | Townsend v. State Farm (La. App. 2001) | Summary judgment for State Farm affirmed: the policy did not require diminished value where full and adequate repair had been paid for. |
| South Carolina | Schulmeyer v. State Farm (S.C. 2003) | On a certified question, the policy did not require payment for diminution in market value where the vehicle was fully restored. |
| Tennessee | Black v. State Farm (Tenn. Ct. App. 2002) | A limit of liability set at the lower of actual cash value or the cost of repair or replacement was not ambiguous. Judgment for State Farm affirmed. |
| Mississippi | Blakely v. State Farm (5th Cir. 2005) | A federal appeals court read the policy’s defined cost of repair or replacement as not including diminished value. |
| Colorado | Lovell v. State Farm (10th Cir. 2006) | A federal appeals court enforced an endorsement stating that loss “does not include any reduction in the value of any vehicle.” |
| Delaware | Delledonne (Del. Super. 1992); O’Brien (Del. 2001) | A 1992 trial-level ruling found coverage. In 2001 the Delaware Supreme Court, in a case with State Farm among the defendants, held that repair-or-replace wording does not contemplate payment for diminution of value and said the earlier ruling incorrectly stated Delaware law. |
| Washington | Heaphy v. State Farm (Wash. Ct. App. 2003) | State Farm agreed that proven diminished value would be covered under the policyholder’s underinsured motorist provisions. The court sent the dispute over the amount to arbitration. |
How to read these rulings
Each one interpreted the policy wording in front of that court under that state’s law. Policy forms change, and most of these decisions are more than twenty years old. They do not describe how State Farm handles claims today, and one state’s ruling does not carry over to another. Read your own policy, including any endorsement, and the page for your state.
When State Farm insures the other driver
In Martin v. State Farm (Ill. App. Ct. 2004), people hit by a State Farm policyholder settled their repair claim and later sued, saying nobody had told them about diminished value. The Illinois Appellate Court held that the insurer had no duty to tell third-party claimants about a possible diminished value claim, even though they also held their own State Farm policies. It did not decide whether the at-fault driver owed diminished value. The practical point from that Illinois case is to raise diminished value yourself, in writing. The Illinois page has more.
Where to send the claim
When we checked in October 2026, State Farm’s auto claims page offered filing online, in its app or by phone, and linked to a separate section for claims by non-customers. If a claim is already open, send the demand to the assigned adjuster under that claim number. How to contact an auto insurer explains how to confirm the right contact, and the demand letter guide lists what to send.
Evidence, and what to do if you disagree
An independent diminished value appraisal documents the loss from your repair records and comparable vehicles. If you and the insurer cannot agree, after your appraisal and filing an insurance complaint cover the options. The steps shared by every insurer are in filing a diminished value claim with any insurer.
Sources
- State Farm Mut. Auto. Ins. Co. v. Mabry, 274 Ga. 498, 556 S.E.2d 114 (2001)
- Pritchett v. State Farm Mut. Auto. Ins. Co., 834 So. 2d 785 (Ala. Civ. App. 2002)
- Townsend v. State Farm Mut. Auto. Ins. Co., 793 So. 2d 473 (La. App. 2 Cir. 2001)
- Schulmeyer v. State Farm Fire & Cas. Co., 353 S.C. 491, 579 S.E.2d 132 (2003)
- Black v. State Farm Mut. Auto. Ins. Co., 101 S.W.3d 427 (Tenn. Ct. App. 2002)
- Blakely v. State Farm Mut. Auto. Ins. Co., 406 F.3d 747 (5th Cir. 2005)
- Watkins v. Allstate Prop. & Cas. Ins. Co., No. 23-60141 (5th Cir. Jan. 12, 2024) (describing Blakely)
- Lovell v. State Farm Mut. Auto. Ins. Co., 466 F.3d 893 (10th Cir. 2006)
- Delledonne v. State Farm Mut. Auto. Ins. Co., 621 A.2d 350 (Del. Super. 1992)
- O’Brien v. Progressive Northern Ins. Co., 785 A.2d 281 (Del. 2001)
- Heaphy v. State Farm Mut. Auto. Ins. Co., 117 Wn. App. 438, 72 P.3d 220 (2003)
- Martin v. State Farm Mut. Auto. Ins. Co., 348 Ill. App. 3d 846, 808 N.E.2d 47 (2004)
- State Farm: car accident claims page
Common questions
Does State Farm pay diminished value?
It depends on the state and on whether you are claiming against a State Farm policyholder or on your own State Farm policy. Courts have ruled both ways on State Farm policies: Georgia’s Supreme Court found coverage in 2001, and courts applying the law of several other states did not.
Does the Georgia Mabry decision apply in my state?
No. Mabry interpreted a State Farm policy under Georgia law. Courts in other states have read similar wording differently. Check the page for your state.
Is Autoloss affiliated with State Farm?
No. Autoloss is an independent appraisal company. It is not affiliated with or endorsed by State Farm, and the name is used only to identify the insurer.
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Not sure whether an appraisal will help?
The claim review is free: we look at your situation and tell you whether an appraisal is likely to help. The appraisal itself is a paid report. We help from start to finish, including a custom demand letter, and our support staff is a phone call away throughout the process.